Tax adviser: BIR must target P10-T collection

The Bureau of Internal Revenue (BIR) must intensify investigations into big companies and wealthy individuals, including politicians, to stop tax evasion in the country and boost tax collection to P10 trillion, a tax adviser and advocate of efficient taxation said.

Asian Consulting Group (ACG) founder and chief executive officer Mon Abrea said the BIR must aim to identify at least 100 biggest tax evaders in the country and hold them accountable.

In this way, the ACG founder said the government can mobilize much more funds to implement critical projects for public service effectively.

"Ninety-seven percent of our tax collection is still voluntary," Abrea said last Thursday in a media briefing in Bonifacio Global City, Taguig. "Politicians are living in big houses and own big SUVs. The amounts of their assets are so much bigger compared to the salaries they are receiving," he added.

Abrea delivered these statements to answer questions from the media regarding the ACG-led International Tax and Investment Conference to be held on 26 March at Manila Marriott Hotel in Pasay City.

His statements also came amid the campaign season for the mid-term elections on 12 May for national and local positions, including senator and mayor.

With intensified crackdown on big-time tax evaders, Abrea said the BIR should be able to boost tax collection to P10 trillion or higher, above its P2.86 trillion collection last year. "Vietnam collected almost P20 trillion, yet the Philippines is a bigger nation," he said.

BIR Commissioner Romeo Lumagui Jr. said he aims to collect at least P3.23 trillion in total tax collection this year.

Abrea added his desired P10-trillion collection should help pay for the government's growing debt which rose by nearly 2 percent to P16.31 trillion between December 2024 and January 2025, according to the Bureau of the Treasury.

The ACG executive added the government will not be able to boost tax collection if fear about tax compliance is mostly felt by micro, small, and medium enterprises (MSMEs).

"All the efforts of the BIR chasing after all the MSMEs only contribute less than three percent because some are even delinquent accounts. Where will we get the funds to pay the national debt?" Abrea said.

Through its consulting services, ACG has helped clients comply with the BIR policies and avoid tax cases, resulting in over P190-billion savings for its clients in Asia-Pacific.

In a statement in August 2023, BIR said it already filed tax evasion cases against 127 corporations which it claimed had over P6-billion unpaid taxes.

Lumagui said the BIR has also collected over P4 billion from businesses who issued ghost receipts, up from P600 million in 2023. The criminals included vape and cigarette sellers at physical and online stores.

To verify financial data of numerous firms, the BIR had signed an agreement with the Securities and Exchange Commission (SEC) on the Swift Corporate and Other Records Exchange Protocol which enables the BIR to easily obtain companies' articles of incorporation, general information sheet, and audited financial statements. SEC Chairperson Emilio Aquino promised to transfer data requested by the BIR within 24 hours.

"This will be a great help for us for the verification of corporations' information. This will speed up our investigations on possible cases against corporations," Lumagui said.